Japan’s Panasonic Corp said yesterday it will slash investment in flat screen televisions and withdraw from unprofitable businesses to cope with the economic downturn.
The company, which has enjoyed brisk sales of plasma televisions, cell telephones and digital cameras in recent years, said it would undertake “drastic structural reforms” to streamline its operations.
It plans to close down overseas operations that are losing money, although details of the overhaul have not yet been decided.
“The current situation is not just a simple economic slump. Global demand is shrinking and shifting to the emerging markets,” Panasonic president Fumio Ohtsubo told a media conference.
“We cannot expect an easy recovery. We must focus our efforts on structural reform, strengthening our company, and prepare for future growth,” he said.
Panasonic, the world’s largest consumer-electronics maker, cut its planned investment in two flat-panel factories by 23 percent as the global economic slump eroded demand.
The spending will be reduced to ¥445 billion (US$4.9 billion) by 2012, from an initially intended ¥580 billion, Osaka-based Panasonic said. The factories are located in the cities of Amagasaki and Himeji in western Japan.
The company joins makers including LG Display Co, the world’s second-biggest producers of liquid-crystal displays (LCDs), in scaling back output as prices fall.
Panasonic projected it will sell 15.5 million plasma and LCD televisions in the 12 months starting April 1, 50 percent more than this fiscal year, spurred by purchases in developing countries including Brazil, Russia, India, China and Vietnam.
Shipments of LCD televisions worldwide will climb 13 percent to 117 million sets this year even as their sales value drops 11 percent to ¥6.2 trillion, Daiwa Institute of Research said in a report last month.
Prices of digital audio-visual products tend to drop about 20 percent to 30 percent annually, Daiwa Institute said.
Panasonic lost 1.3 percent to close at ¥1,204 on the Tokyo Stock Exchange before the company’s announcement.
The stock lost 52 percent last year.